India Economy Updates - Govt introduces LLP business structure

India today introduced a new kind of business structure, Limited Liability Partnership (LLP), a form of entity where the partners' liability is limited to the extent of their stake which will specially benefit the services sector.

The LLP Act, was passed by the Parliament and given assent by the President Pratibha Patil, was notified today after being approved by the Election Commission to do so, sources in the Ministry of Corporate Affairs told PTI.

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Rules under the Act were also notified today. The Act will specially benefit the service sector by providing a platform to professionals like chartered accountants and company secretaries to come together to form an LLP and provide a single-window shop to all people wanting to avail professional services.

The LLP is a hybrid of partnership firms and companies. It is a separate legal entity and the partners have the advantage of being liable to the extent of their shareholding in the entity. The software, a part of the government's e-governance programme MCA 21, for incorporating and formation of the company has been prepared and the new LLPs will register online, sources added.

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